AUD/USD’s rally from 0.5506 extended to as high as 0.7365 last week. Initial bias stays on the upside this week for 0.7635 long term fibonacci level next. On the downside, break of 0.7135 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.
In the bigger picture, rebound from 0.5506 medium term bottom is seen as correcting whole long term down trend from 1.1079 (2011 high). Further rise should be seen to 38.2% retracement of 1.1079 (2011 high) to 0.5506 (2020 low) at 0.7635 next. On the downside, break of 0.6776 support is needed to be the first sign of completion of the rebound. Otherwise, outlook will stay bullish in case of pull back.
In the longer term picture, the rebound from 0.5506 is strong and steep. Bullish convergence condition is seen in monthly MACD. 55 month EMA is also taken out. The case of long term reversal is building up. Focus is now on 38.2% retracement of 1.1079 (2011 high) to 0.5506 (2020 low) at 0.7635. Decisive break there will confirm bullish reversal and target 61.8% retracement at 0.8950. Nevertheless, rejection by 0.7635 will retain bearishness.
